Tuesday, March 6, 2012

Conservatives' Government Benefits

James Kwak on hidden government handouts (h/t Mark Thoma):
One of the key themes we discuss in White House Burning is the rise to power of the conservative anti-tax, anti-government movement over the past half century. Government tax and spending policy is largely about distributional issues. When the poor are (indirectly) in power, they take their winnings in the form of benefit programs, since they don’t have a lot of taxes to cut. When the rich are in power, they take their winnings in the form of tax breaks. (For the most part: there are also sweetheart no-bid contracts, subsidies for non-commercial airports, and so on.)
What’s great about this for the rich is that those tax breaks only strengthen their political position. Tax breaks—say, preferred rates on dividends—mean either higher taxes on everyone else or larger deficits, both of which are unpopular. Since no one can see what the government is doing, it becomes less popular. Higher taxes make people think they’re not getting their money’s worth; larger deficits make them think the government is incompetent. Either way, they get mad at the parts of government they can see, not the tax breaks that the rich benefit from. Increasing anti-government sentiment leads to what you saw in 2010 and today: the Tea Party, demonization of the federal government, and a mad race among Republicans to see who can cut rich people’s taxes by the most.
I guess that would explain all the old people at tea party rallies on their Medicare paid-for Rascal scooters.  I think it definitely applies to the reddest of red state voters in rural areas.  We may not like the government, but if they are mailing out a check, we'll take it.

No comments:

Post a Comment